But both companies have this in common—their stocks have captured the imaginations of investors. And on Thursday, both stocks moved sharply in different directions following significant company-specific news.

In the case of Twitter (ticker: TWTR), the stock fell 24% Thursday after the company reported quarterly results Wednesday that indicated a sharp slowdown in user growth.

And following the massive drop in shares, those short sellers may be tempted to lock in gains. "But they shouldn't close out those short positions just yet—Twitter has an additional 20% to 25% downside from here," he writes.

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So what's eating Sterman about the company? He makes a number of important points.

For example, though Twitter needs to sharply boost its audience and do a better job of making money off of that audience, the microblog site "has not been a popular choice among key potential advertisers, according to a survey conducted by Cowen & Co."

In addition, Twitter's ability to sharply boost revenue per user is still unproved. And the company's valuation is still high even after the selloff.

"Clearly, Twitter is experiencing growing pains, but the fact that user base growth slowed sharply—on a sequential basis—should be grounds enough to steer clear of this high-flier," he writes.

"While details remains sketchy, almost as if the deal was signed so it could be announced as a cover for earnings, this much is clear: Had this deal not been announced, rather than fly after the close, Green Mountain's stock would've likely been pummeled," Greenberg writes.

"Buffett's horse in the bet is a low-cost S&P index fund, and Protégé's is the averaged returns to investors (after all fees) of five hedge funds of funds that the firm carefully picked for the contest," Loomis writes.

At the end of 2013, she writes, Vanguard's Admiral shares—the S&P index fund that's carrying Buffett's colors—were up for the six years that began Jan. 1, 2008, by 43.8%. For the same period, Protégé's five funds of funds, on the average, gained only by an estimated 12.5% (a figure minutely uncertain because some of the funds lack final figures for 2013).

At the same time, Roche points out that Buffett's S&P investment has likely come with greater volatility than Protégé's collection of hedge funds, though the company hasn't shared exactly which funds it purchased.

"So that 43% looks good, but it doesn't at all reflect the level of risk that's being taken," he adds.

Somehow, that might seem like small consolation for the hedge-fund industry. On this bet, they are looking very much like the Denver Broncos.